Concierge medicine and direct primary care both raise legal issues, though they present different models in terms of how they handle insurance.
Concierge medicine and direct primary care often get confused, because both have a subscription fee.
However, in concierge medicine, patients pay for luxury medical services and access, where in direct primary care (DPC) is a patient-provider relationship, in which the patient purchases primary care directly from the physician, without an insurer payer, and physicians typically also provide comprehensive care and preventive services.
Concierge medicine can raise legal issues from anti-kickback considerations to questions about whether a person is engaged in the business of insurance.
There are several models of direct primary care—for example:
- Monthly fee only: covers all visits
- Monthly fee: visits plus labs
- Monthly fee plus a per-visit fee
Direct primary care usually does not cover specialists, imaging, institutional or facility care, or pharmacy.
Both concierge medicine and direct primary care can implicate Stark, federal anti-kickback law, and federal and state self-referral, anti-kickback, and fee-splitting laws.
Health care reform efforts actually contemplate the provision of direct primary care. Specifically, the Affordable Care Act, Section 1301 (42 USC 18021) defines “qualified direct primary care medical home plans.” Criteria are to be promulgated by the Secretary of Health & Human Services, so at this moment we are awaiting further regulation.
The question as to whether direct primary care, like concierge medicine, constitutes the business of insurance, is not part of healthcare reform, but rather is a matter of state law. States differ in terms of whether the entity falls into insurance rules and is engaged in unlicensed practice of insurance.
New York is fairly restrictive, for example. In New York, acceptance of too much risk can trigger insurance law (for example, unlimited visits allowed to the primary care doctor).
By way of comparison, Oregon has a less restrictive approach. Under ORS 731.036, “retainer practices” are not insurance, but must register with the Insurance Commission. This is limited to exclusively primary care and not specialist care.
California is a bit more ambiguous. The operative statute, Health & Safety Code sec. 1345(f)(1) defines a health plan as any person who undertakes to arrange for the provision of healthcare services. In determining whether the direct primary care practice is operating as a health plan, California will tend to look to such factors as: actual consumer harm; whether the product is marketed like insurance, or compared in its marketing materials to insurance; whether the entity bears risk for directing patients to healthcare providers.
Note that “Provider” is defined in Health & Safety Code Section 1345(i)—an arranger of healthcare services that is not a “provider” arguably is more likely to be found to be a “health plan.” When a provider offers direct primary care (and not specialist care), arguably there is less risk of Department of Managed Health Care (DMHC) enforcement. However, these statutes are a bit mysterious in terms of their reach.
If you are planning to move into the direct primary care medicine model, consult with a healthcare lawyer who understands the various legal issues, both federal and state, that can be brought to bear. Contact our concierge and direct primary care legal team for a consultation.